Making a difference one message at a time...

January 15, 2014

Over the past seven years the United States has dropped from one of the world’s leaders in Economic Freedom to now no longer ranking in the Top 10 Nations. This comes from the just published 2014 “Index of Economic Freedom,” released yesterday by the Heritage Foundation. The reason – we no longer have low taxes, in fact we now some of the world’s highest taxes on business and citizens. Further, we have weak fiscal soundness and our government control of day-to-day life has hugely increased over the last few years. The top nations with Economic Freedom are Hong Kong, Singapore, Australia, New Zealand, Switzerland and Canada. Other nations now ranking toward the top are Poland, the Czech Republic and Germany.

December 22, 2013

Dallas-Fort Worth Employers Plan to Increase Hiring in Early 2014

Employers in Dallas-Fort Worth and across Texas expect to hire at a healthy pace in the first quarter of 2014 and faster than the national average, according to the Manpower Employment Outlook Survey. The Texas employment outlook is the second best in the nation, after North Dakota. Twenty-one percent of Texas companies surveyed plan to hire in early 2014, employees. Seventy-one percent expect no changes, 5 percent plan to cut jobs and 3 percent aren’t sure of their plans. That yields a 16 percent net employment outlook, compared with 15 percent at this time last year. The outlook is even stronger for Dallas-Fort Worth, where 26 percent of companies plan to hire, according to the Manpower survey. In addition, 64 percent plan no changes, 7 percent plan to cut jobs and 3 percent are undecided. The area’s first-quarter net employment outlook is 19 percent, up from 12 percent a year earlier. Employers’ hiring expectations for the first quarter of 2014 are “significantly more optimistic” than the 8 percent outlook for the current quarter, said Ron Griffin, Manpower’s regional vice president for Dallas-Fort Worth and Houston. The best job prospects in Dallas-Fort Worth for the first quarter appear to be in the construction, manufacturing, transportation and health care industries, he said.

August 21, 2013

Annual home value appreciation hit the 6 percent mark for the first time in nearly seven years in July, according to Zillow’s Real Estate Market Reports for the month.

The Zillow Home Value Index reached $161,600 in July, up 0.4 percent from June and an even 6.0 percent from July 2012. July marked the 14th straight month of annual home value gains.

“After three straight months of annual home value appreciation above 5 percent, the U.S. housing market recovery has proven it is on very sound footing,” said Zillow chief economist Dr. Stan Humphries. “We have entered a new phase in the recovery when we can begin to turn away from ugly recent history and turn toward what the housing market of the future will look like and how it will act.”

Despite these strides, however, Humphries noted that this is no time for policymakers and industry professionals to rest on their laurels.

“It may be tempting to look at how the market is currently performing and think that tackling GSE reform and other large issues is no longer necessary. But while we can afford to turn away from the recent past, we cannot afford to forget it, and simply ignoring these problems only dooms us to repeat them,” he said. “How we handle these all-important policy debates will be critical in keeping the housing market on sound footing for years to come.”

Of the 393 metros tracked in July, 289 (73.5 percent) reported month-over-month price appreciation, and 303 (77.1 percent) showed annual appreciation. All 30 of the largest metro areas registered both monthly and yearly appreciation, and all “have hit their bottom and are expected to show appreciation in the next 12 months,” Zillow said.

Metros with the largest annual increases in July included Sacramento (33.1 percent), Las Vegas (30.8 percent), and San Francisco (27.8 percent).

For the 12-month period ending July 2014, national home values are forecast to rise another 4.8 percent to approximately $169,308, according to the Zillow Home Value Forecast. Of the largest metro areas, Sacramento, Riverside, and San Francisco are expected to show the most appreciation over the next year.

July 28, 2013

Existing-home sales declined in June but have stayed well above year-ago levels for the past two years, while the median price shows seven straight months of double-digit year-over-year increases, according to the National Association of REALTORS®.

Total existing-home sales, which are completed transactions that include single-family homes, townhomes, condominiums and co-ops, dipped 1.2 percent to a seasonally adjusted annual rate of 5.08 million in June from a downwardly revised 5.14 million in May, but are 15.2 percent higher than the 4.41 million-unit level in June 2012.

Lawrence Yun, NAR chief economist, said there is enough momentum in the market, even with higher interest rates. “Affordability conditions remain favorable in most of the country, and we’re still dealing with a large pent-up demand,” he said. “However, higher mortgage interest rates will bite into high-cost regions of California, Hawaii and the New York City metro area market.”

According to Freddie Mac, the national average commitment rate for a 30-year, conventional, fixed-rate mortgage rose to 4.07 percent in June from 3.54 percent in May, and is the highest since October 2011 when it was also 4.07 percent; the rate was 3.68 percent in June 2012.

Total housing inventory at the end of June rose 1.9 percent to 2.19 million existing homes available for sale, which represents a 5.2-month supply at the current sales pace, up from 5.0 months in May. Listed inventory remains 7.6 percent below a year ago, when there was a 6.4-month supply. “Inventory conditions will continue to broadly favor sellers and contribute to above-normal price growth,” Yun remarked.

The national median existing-home price for all housing types was $214,200 in June, up 13.5 percent from June 2012. This marks 16 consecutive months of year-over-year price increases, which last occurred from February 2005 to May 2006.

Distressed homes – foreclosures and short sales – were 15 percent of June sales, down from 18 percent in May, and are the lowest share since monthly tracking began in October 2008; they were 26 percent in June 2012. The decline in sales of distressed homes, which typically sell at a reduced price, accounts for some of the price growth.

Eight percent of June sales were foreclosures, and 7 percent were short sales. Foreclosures sold for an average discount of 16 percent below market value in June, while short sales were discounted 13 percent.

NAR President Gary Thomas said some owners who were hurt by the downturn are now in the market. “Rising values have improved the position of homeowners, and 16 percent of REALTORS® surveyed in June report they worked with a client that previously had an underwater mortgage,” he said.

“Of those previously underwater owners, 53 percent were planning to buy another home and 22 percent intend to rent, but 25 percent weren’t sure what they’d do. In addition, 47 percent of REALTORS® report they have potential sellers who are waiting for additional price appreciation before they sell,” Thomas said.

The median time on market for all homes was 37 days in June, down from 41 days in May, and is 47 percent faster than the 70 days on market in June 2012. Short sales were on the market for a median of 68 days, while foreclosures typically sold in 39 days and non-distressed homes took 35 days. Forty-seven percent of all homes sold in June were on the market for less than a month.

First-time buyers accounted for 29 percent of purchases in June, compared with 28 percent in May and 32 percent in June 2012. “First-time buyers should be closer to 40 percent of the market, but they’re held back by the frictions of tight credit and very limited inventory in the lower price ranges in most of the U.S.,” Yun said.

All-cash sales made up 31 percent of transactions in June, down from 33 percent in May; they were 29 percent in June 2012. Individual investors, who account for many cash sales, purchased 17 percent of homes in June, down from 18 percent in May and 19 percent in June 2012.

Single-family home sales slipped 1.1 percent to a seasonally adjusted annual rate of 4.50 million in June from 4.55 million in May, but are 14.5 percent above the 3.93 million-unit pace in June 2012. The median existing single-family home price was $214,700 in June, which is 13.2 percent above a year ago.

Existing condominium and co-op sales fell 1.7 percent to an annualized rate of 580,000 units in June from 590,000 in May, but are 20.8 percent higher than the 480,000-unit level a year ago. The median existing condo price was $210,200 in June, up 15.4 percent from June 2012.

Regionally, existing-home sales in the Northeast declined 1.6 percent to an annual rate of 630,000 in June but are 16.7 percent above June 2012. The median price in the Northeast was $270,400, which is 6.8 percent above a year ago.

Existing-home sales in the Midwest were unchanged in June at a pace of 1.21 million, and are 17.5 percent higher than a year ago. The median price in the Midwest was $170,100, up 8.9 percent from June 2012.

In the South, existing-home sales slipped 1.5 percent to an annual level of 2.03 million in June but are 16.0 percent above June 2012. The median price in the South was $186,300, which is 13.7 percent above a year ago.

Existing-home sales in the West declined 1.6 percent to a pace of 1.21 million in June but are 11.0 percent above a year ago. With ongoing supply constraints, the median price in the West was $282,000, a jump of 19.9 percent from June 2012.

Sales of newly built, single-family homes surged 8.3 percent to a seasonally adjusted, annual rate of 497,000 units in June, their fastest pace in the last five years, according to data released today by HUD and the U.S. Census Bureau.

“New-home buyers are returning to the market in larger numbers as firming prices, shrinking inventories of homes for sale and improving local economies convince them that now is the time to make their move,” said Rick Judson, chairman of the National Association of Home Builders (NAHB) and a home builder from Charlotte, N.C.

“Meanwhile, the very low supply of new homes on the market is indicative of the difficulty that builders are having in keeping up with demand due to availability issues with regard to materials, credit, labor and lots for development. The takeaway from this report is that the housing recovery is solidly on track and isn’t going to be derailed by slightly higher mortgage rates,” says NAHB Chief Economist David Crowe. “After years of fence-sitting, buyers are back and are ready to move forward with an investment in homeownership.” Looking ahead, he said he anticipates further, though more incremental gains in sales through the end of this year. Three out of four regions saw solid gains in new-home sales activity in June, with the Northeast, South and West posting increases of 18.5 percent, 10.9 percent and 13.8 percent, respectively. The Midwest posted an 11.8 percent decline following an above-trend bump in activity in May.

The inventory of new homes for sale declined to 161,000 units in June, marking a razor-thin, 3.9-month supply at the current sales pace. The months’ supply of homes for sale has not fallen below this level since March of 2004.

July 24, 2013

The ongoing housing recovery coupled with improvement in both consumer confidence and the labor market are expected to boost economic growth in the second half of the year, according to Fannie Mae’s (FNMA/OTC) Economic & Strategic Research Group. The latest jobs report showed steady year-to-date job creation and measures of consumer confidence are at or near recovery highs. Furthermore, despite a sharp increase in mortgage rates during the past two months, home sales have held up and home prices have continued to post gains, helping to keep the economy on a positive—albeit modest—growth path in 2013.

“We are keeping a very close eye on the effect of rising mortgage rates on the housing market and the economy, but our July forecast is little changed from last month,” says Fannie Mae Chief Economist Doug Duncan. “We continue to see growth in housing, partly due to an increase in existing home sales as buyers choose to act while rates remain near historic lows. Consumer attitudes are improving amid a strengthening employment sector and we should begin to see a moderate pickup in consumer spending. Overall, we expect economic growth to come in at 2.0 percent in 2013, but further momentum later this year should help carry growth in 2014 to an above-par pace of 2.6 percent, the strongest since 2005.”

On the housing front, mortgage rates are expected to continue to rise gradually, averaging 4.7 percent in the fourth quarter of this year—about 40 basis points higher than the June forecast—but the forecast of home sales is little changed, with expectations of an 8.0 percent rise in 2013. However, while the surge in mortgage rates has not significantly hurt purchase mortgage applications, it has led to a marked decline in refinancing applications, which is expected to continue next year.

June 03, 2013

U.S. Secretary of the Treasury Jack Lew announced today that Treasury is extending the Making Home Affordable Program for another two years. The new expiration date is set for December 31, 2015.

The program offers help to homeowners through solutions including the Home Affordable Modification Program (HAMP), Home Affordable Foreclosure Alternatives (HAFA), and the Second Lien Modification Program.

Annual family income: $21,700Money the family spent: $38,200New debt on the credit card: $16,500Outstanding balance on the credit card: $142,710Total budget cuts so far: $385

Got it? OK now …

Lesson # 2Here’s another way to look at the Debt Ceiling:Let’s say you come home from work and find there has been a flood in your home and it has water all the way up to your ceilings.What do you think you should do?Raise the ceiling or remove the water?

July 21, 2012

RISMEDIA, Saturday, July 21, 2012— Today is a tempting time to buy a home with interest rates and prices at their lowest levels in years. Deciding whether to buy or rent can be complicated, and potential homebuyers have a lot to consider this summer. As part of National Homeownership Month, the American Bankers Association came up with these key questions to help shoppers make wise financial choices when considering buying a home.

1. How much can you afford to put down? Can you afford the monthly payment?A mortgage down payment of 5 to 20 percent of the selling price is typical, but can vary depending on the situation. The size of the down payment will impact the monthly cost. Assess your financial health, determine how large of a down payment you can afford and consider if you can then afford the monthly cost.

2. What other debt do you have? Consider all of your current and expected financial obligations and ensure you are able to make all the payments. Aim to keep total rent or mortgage payments plus other credit obligations fewer than 35 to 40 percent of your monthly income. If you can't keep payments below that, you may be better off renting for a while or searching for a more affordable home.

3. What is my credit score?Can I qualify for a good interest rate? A high credit score indicates strong creditworthiness, which qualifies you for better interest rates on a mortgage. Maxing out your credit lines and paying bills late will lower your credit score, and the impact of a credit score on interest rates can be significant. For instance, a borrower with a score of 760 could pay nearly 2 percentage points less in interest than someone with a score of 620. That equates to over $3,000 less in mortgage payments each year. If your credit score is low, you may want to delay buying a home and take steps to raise your score.

4. How much will taxes, monthly maintenance or other fees cost? Owning a home means you will have to pay real estate taxes and other costs like insurance and maintenance. However, owning a home can bring tax savings at the end of the year. Remember to factor in these costs and incentives. Renters have neither these costs, nor tax advantages.

5. How many years will I stay here? Generally, the longer you plan to live someplace, the more it makes sense to buy. Over time, you can build equity in your house where renters do not. Yet, renters have greater flexibility to move as they don't have to worry about finding new tenants.